Looming tax credit battle in Oregon

SALEM -- A political battle is expected in the Legislature this year about tax credits set to expire as the state faces a $3 billion budget shortfall.

Some of those credits include the estimated $10 million tax break for filmmakers to make movies in Oregon, and more than $4 million to encourage trucking companies and individuals to use clean-burning diesel engines.

The dozens of tax credits set to expire during the next several years probably will bring intense lobbying from various groups and businesses asking that their tax breaks be spared, The Bulletin newspaper in Bend reported.

For the first time, the Legislature is expected to impose a cap on income tax credits to help cope with its budget situation.

It's the most direct line drawn yet between the state's spending and its tax breaks, and it's a significant one, considering that state and local governments in Oregon spend about as much in tax breaks, or "expenditures," as they do in actual tax dollars spent on services, according to state budget analysts.

Sen. Chris Telfer, R-Bend, who has been named to the new tax credit committee, said she will be skeptical of rosy job-creation scenarios she says she's heard from advocates of tax breaks.

The committee is slated to consider about 20 income tax credits that are set to expire next year.